EUR\/GBP rose for a second day and reached about 0.8725 in early European trading after weaker UK jobs figures. UK claimant count rose by 28.6K in January and the unemployment rate increased to 5.2% in the three months to December.<\/p>\n
Average Earnings Excluding Bonus eased to 4.2% year on year, in line with expectations. Average Earnings Including Bonus slowed to 4.2% from 4.6%.<\/p>\n
The figures point to softer UK labour conditions at the start of 2026 and support expectations of a 25-basis-point Bank of England rate cut in March. This weighed on the pound and helped lift the pair.<\/p>\n
The euro was little changed after Germany\u2019s final CPI matched the flash estimate at 2.1% year on year in January. The data did not change expectations for European Central Bank policy.<\/p>\n
Talk of a possible ECB rate cut may limit further euro gains. A break above last week\u2019s monthly peak near 0.8740 could open the way towards 0.8800, last seen in December 2025.<\/p>\n
The report was corrected on 17 February at 08:17 GMT, stating the January claimant count was 28.6K, not 28.8K.<\/p>\n
The rise in the UK unemployment rate to 5.2% is a clear signal of a cooling economy, a significant jump from the 4.5% levels we saw just a few months ago in late 2025. This weakening labor market is cementing our view that the Bank of England will deliver a rate cut next month, with overnight swaps now pricing in an 85% probability of a March cut. Consequently, Sterling is under pressure, creating a clear upward path for the EUR\/GBP cross.<\/p>\n
We believe purchasing call options on EUR\/GBP is the most direct strategy to capitalize on this trend. With the spot price testing the 0.8740 resistance, options with a strike price around 0.8750 or 0.8800 look attractive for the coming weeks. This approach allows for profiting from the expected upward move towards levels not seen since December 2025, while strictly limiting downside risk.<\/p>\n
We’ve already seen one-month implied volatility for EUR\/GBP tick up from 7% to over 8.5% following the data release, suggesting the market is preparing for bigger price swings. While the primary driver is the weak Pound, the possibility of the ECB shifting its own stance on rates presents the main headwind. This underlying uncertainty makes options a prudent tool for managing risk compared to an outright spot position.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/GBP climbed to 0.8725 after weak UK jobs data boosted BoE cut bets; euro steady.<\/p>\n","protected":false},"author":62,"featured_media":17032,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42063","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42063"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42063\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17032"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}